China’s Social Credit System (SCS)

Is this a unique dystopia or simply part of a global trend?

An entry by Su A Kim and Maria Jose Vargas Ramirez

Tuesday, 30 August 2022

The science fiction series ‘Black Mirror’, broadcast on Netflix, explores a dystopian near-future. The first episode of Season 3, ‘The Fall’, depicts a world where every interaction with another person is assessed. Social media scores determine everything, from flight bookings to hospital treatment. This is a hypothetical dystopian scenario. However, this scenario is becoming a reality in China. In China, some citizens are unable to book flights or use the slow internet due to a low SCS.

Perhaps one of the first things people might think is that this would never happen here, in established democracies or countries of the Western Global North in general.

What is China’s SCS?

The SCS was officially announced in 2014 and began to be rolled out nationwide. According to the outline of the plan for establishing an SCS published in 2014, the SCS is an important component of the socialist market economy and the social governance system. This system plays a key role in preventing economic risks by improving the market’s credit environment. It also aims to reinforce the perception that ‘a strong ethos should be fostered throughout society, whereby maintaining trust is honourable and breaching trust is disgraceful, and to ensure that sincerity and trustworthiness become conscious norms of behaviour amongst all people’.

This makes it easier for people and businesses to make informed business decisions. A high social credit score can also serve as an indicator of trust in a business context.

How does China’s social credit system work?

The China Social Credit System (SCS) assesses individuals based on the aggregation and analysis of data. In some pilot schemes, this has involved a single numerical score (usually between 1 and 1,000, similar to a FICO score), or a letter grade (usually from A to D).

In the case of a company, ratings from suppliers and customers, as well as tax compliance, affect a company’s credit score. A high SCS score brings benefits, but a low score can result in penalties or sanctions for individuals or companies.

The criteria used to measure an SCS score vary from city to city. In the Chinese city of Rongcheng, all residents are initially allocated 1,000 points. Citizens living in this area have points deducted for bad behaviour, such as traffic offences. Conversely, they can earn points for good behaviour, such as community service and charitable donations. The SCS score may prevent students from attending certain universities or schools if their parents have a poor social credit rating. For example, in 2018, a student was denied entry to university because their father was on a debtors’ blacklist.

The following figure illustrates the deduction and award of points under the SCS, as well as the benefits and sanctions that can result from it.

In fact, the concept of an SCS is not exclusively Chinese, nor is the use and misuse of data to analyse human behaviour and actions. However, if the Chinese system were to be fully implemented, it would still be something quite unique. It is both unique and part of a global trend.

And although there is still no proposal for such an ambitious unified system in any Western democracy, there are already some similar structures and cultures of social media use in place that bear more resemblance to the SCS than we might think.

The first of these examples is credit scoring systems:

Banks and financial institutions already use credit scoring systems (CSS) to evaluate not only financial but also social data, in order to assess an individual’s creditworthiness and trustworthiness. So these institutions are not only interested in people’s financial situation, but also make judgements about their trustworthiness based on other personal information – such as where you live, the type of house and neighbourhood you live in, and whether you have neighbours with poor credit scores, etc. Now there is also a rise in private financial companies that are building algorithms capable of predicting your trustworthiness and creditworthiness based solely on your social media and email activity and information.

Another similar phenomenon is the rise of metrics, tracking and self-quantification movements:

Nowadays, many aspects of human behaviour and habits are being measured quantitatively. We track all sorts of aspects of our everyday lives, both voluntarily and involuntarily, through wearables, mobile apps and even social media. We can track how much we eat, how far we walk, how we’re feeling, how we sleep, how much money we spend, and so on… This data is, of course, being collected by countless companies to tailor their products and targeted content to us and, ultimately, to extract as much money as they can from us.

But, much like the Chinese credit scoring system, companies are offering rewards and incentives for specific behaviours tracked by these technologies.

In Australia, some insurance companies offer lower premiums on life insurance if individuals choose to share data from their fitness-tracking devices. In the US, health insurance companies offer Amazon gift cards and other prizes as a form of reward if policyholders meet their daily fitness goals via Fitbit wearables and iPhone health apps. And this is gradually becoming a trend amongst life and health insurance companies everywhere.

So, we see that this highly personal information is even beginning to shape essential services such as life and health insurance, where certain behaviours are rewarded and others discouraged, and it has become the norm simply to make our tracking data available for every company and everyone to see.

Thirdly, we have a culture of rating:

This culture of rating already encourages us to rate and evaluate other individuals and services as well. These review and rating mechanisms have become the digital ‘word of mouth’, and have created a new kind of currency in the form of reputation.

Of course, being rated on social media does not yet have life-or-death consequences, but this ‘reputation currency’ already has a significant impact – for example, on which voices on the internet are elevated and amplified, and which remain unheard.

Lastly, we have surveillance infrastructures in Western democracies:

Surveillance infrastructures and technologies have grown in both technical capability and public prominence, not only in China but everywhere. In the name of security, governments tend to treat personal data as intelligence data and treat privacy as a secondary priority. When discussing surveillance cameras and facial recognition, even though China has far more than any other country in the world, if you look at other types of rankings and data – such as the most heavily surveilled cities or the highest number of cameras per capita – you will also find countries such as the UK, India and the US, amongst others.

Is there any hope in this rather bleak landscape? Could the development of potential social credit systems be hindered in the near future?

One of the most prominent beacons of hope is, of course, the General Data Protection Regulation (GDPR). This regulation aims to harmonise data privacy laws across Europe, restructure the way companies approach data privacy and empower citizens with regard to their data privacy. Even though enforcing the GDPR remains difficult and time-consuming, many firms have already been forced to make it easier for individuals to have their data deleted or retrieved, and companies must also ensure that people’s data are not collected and shared without their consent.

However, data is still being collected for commercial and surveillance purposes, and we probably do not know the full extent to which our data privacy has been breached – or not. And it is hard to say whether the GDPR will be enough to stop the forces of state and corporate surveillance, but it is certainly a very important step and a very powerful stance in favour of data privacy.

Is SCS a unique dystopia or simply part of a global trend?

China’s SCS is highly unique in terms of how comprehensive and integrated it is across almost all aspects of life. At first glance, it seems more like a breach of human rights and a tool of state control than anything else, particularly given the way the media have portrayed it, but also the reality of the situation itself.

However, it should also serve as a warning sign and a reminder that there are countless examples in our own societies which not only bear comparison to those of the SCS, but are also infringing upon our privacy rights. This system could demonstrate that we are already heading in that direction and just how far surveillance-related breaches of data privacy can go.

Reference

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